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Chapter 3_ Ethical Behavior and Social Responsibility

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Chapter 3_ Ethical Behavior and Social Responsibility Powered By Docstoc
					Introduction to Management 11e
 John Schermerhorn



             Chapter 3
        Ethical Behavior and
        Social Responsibility
Study Question 1: What is ethical behavior?


    Ethics
        Code of moral principles.
        Set standards of “good” or “bad” or “right” or
         “wrong” in one’s conduct.
    Ethical behavior
        What is accepted as good and right in the
         context of the governing moral code.
Study Question 1: What is ethical behavior?


    Law, values, and ethical behavior:
        Legal behavior is not necessarily ethical
         behavior.
        Personal values help determine
         individual ethical behavior.
Study Question 1: What is ethical behavior?


    Law, values, and ethical behavior:
        Values - underlying beliefs and attitudes that
         help determine individual behavior
           Terminal values - preferences about desired ends
           Instrumental values – preferences regarding the
            means to desired ends
Study Question 1: What is ethical behavior?


    Alternative ethical views
        Utilitarian
           Delivers the greatest good to the most people
        Individualism
           Advances long-term self-interests
        Moral rights
           Maintains fundamental rights of all human beings
Study Question 1: What is ethical behavior?


        Justice view of ethics
           fair and impartial treatment of people according to
            legal rules and standards
               Procedural justice – policies and rules fairly applied
               Distributive justice – equal treatment for all people
               Interactional justice – people treated with dignity and
                respect
               Commutative justice – fairness to all involved
Four views of ethical behavior




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Study Question 1: What is ethical behavior?


      Cultural issues in ethical behavior:
           Cultural relativism
                Ethical behavior is always determined by cultural
                 context.
           Universalism
                Behavior unacceptable in one’s home
                 environment should not be acceptable anywhere
                 else.
           Ethical imperialism
                Imposing one’s ethical standards on others.
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The extremes of cultural relativism and ethical imperialism in
international business ethics.




          Source: Developed from Thomas Donaldson, “Values in Tension: Ethics Away from Home,”
          Harvard Business Review, vol. 74 (September-October 1996), pp. 48-62.



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Study Question 1: What is ethical behavior?


      Sources of information on ethical behavior:
           Institute for Global Ethics at www.globalethics.org
            and on Facebook at
            http://www.facebook.com/pages/Rockland-
            ME/Institute-for-Global-Ethics/51585783748?ref=ts
           Ethics Resource Center at www.ethics.org




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Study Question 2: How do ethical dilemmas complicate the workplace?



 An ethical dilemma
      occurs when choices, although having
       potential for personal and/or organizational
       benefit, may be considered unethical.




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Study Question 2: How do ethical dilemmas complicate the workplace?



      Ethical dilemmas include:
                                 Discrimination

                              Sexual harassment

                              Conflicts of interest

                                 Product Safety

                            Organizational resources



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Checklist for ethical dilemmas


     Step 1 Recognize the ethical dilemma.

     Step 2 Get the facts.

     Step 3 Identify your options.

     Step 4 Test each option: Is it legal? Is it right? Is it beneficial?

     Step 5 Decide which option to follow.

     Step 6 Ask the Spotlight Questions: To double check your decision.
       • “How would I feel if my family found out about my decision?”
       • “How would I feel if my decision was printed in the local paper or posted online?”
     Step 7 Take action

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Study Question 2: How do ethical dilemmas complicate the workplace?




      Influences on Ethical Decision Making
           Ethical framework
                Provides personal rules or strategies for ethical
                 decision making
                Includes personal values
                        Honesty
                        Fairness
                        Integrity
                        Self-respect



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Kohlberg’s stages of individual moral development




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Study Question 2: How do ethical dilemmas complicate the workplace?




      Situational Context and Ethics Intensity
           Will the situation pose an important ethic
            challenge?
                Magnitude of the situation
                Risk of immediate harm
                Proximity and concentration of harm
                Social consensus




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Study Question 2: How do ethical dilemmas complicate the workplace?




   Organizational Culture Influence
        What is considered ethical behavior within
         the organizational context?
             What are the expectations of management?
             What are the expectations of co-workers?
             Is there a code of ethics?




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Study Question 2: How do ethical dilemmas complicate the workplace?



   External environment

                                       Government
                                        laws and
                                       regulations



                            Competitive               Societal
                             climate in              norms and
                            an industry                values


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Study Question 2: How do ethical dilemmas complicate the workplace?



     Ethical behavior can be rationalized by
      convincing yourself that:
            Behavior is not really illegal.

            Behavior is really in everyone’s best interests.

            Nobody will ever find out.

            The organization will “protect” you.



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Study Question 3: How can high ethical standards be maintained?


      Ethics training:
           Structured programs that help participants to
            understand ethical aspects of decision
            making.
           Helps people incorporate high ethical
            standards into daily life.
           Helps people deal with ethical issues
            under pressure.


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Study Question 3: How can high ethical standards be maintained?


      Codes of Ethical Conduct
           Formal statement of an organization’s values
            and ethical principles regarding how to
            behave in situations susceptible to the
            creation of ethical dilemmas




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Study Question 3: How can high ethical standards be maintained?


      Moral Management
           Managers behave in one of three ways

                       immoral   • Chooses to behave
                       manager     unethically


                        amoral   • Disregards ethics of
                                   actions, intentionally or
                        manger     unintentionally


                        moral    • Considers ethical behavior
                       manager     as a personal goal

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How can high ethical standards be maintained?




                                                23
Study Question 3: How can high ethical standards be maintained?


      Areas often covered by codes of ethics:

                   Bribes and kickbacks

                   Political contributions

                   Honesty of books or records

                   Customer/supplier relationships

                   Confidentiality of corporate information

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Study Question 3: How can high ethical standards be maintained?


      Whistleblowers
           Expose misdeeds of others to:
                Preserve ethical standards
                Protect against wasteful, harmful, or illegal acts
           Laws protecting whistleblowers vary




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Study Question 3: How can high ethical standards be maintained?


      Barriers to whistleblowing include:
           Strict chain of command
           Strong work group identities
           Ambiguous priorities




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Study Question 3: How can high ethical standards be maintained?


      Organizational methods for overcoming
       whistleblowing barriers:
           Ethics staff units who serve as ethics
            advocates
           Moral quality circles




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Study Question 3: How can high ethical standards be maintained?


  Social entrepreneurship:
       a unique form of entrepreneurship that seeks
        novel ways to solve pressing social problems
        at home and abroad
            Housing and job training for homeless
            Bringing technology to poor families
            Improving literacy among
             disadvantaged youth
            Offering small loans to start
             minority-owned businesses
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Study Question 4: What is social responsibility and corporate governance?



      Corporate social responsibility and
       governance:
           Looks at ethical issues on the
            organization level.
           Obligates organizations to
            act in ways that serve both
            its own interests and the
            interests of society at large.


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Study Question 4: What is social responsibility and corporate governance?



      Stakeholder Management
           Stakeholders
                persons, groups, and other organizations directly
                 affected by the behavior of the organization and
                 holding a stake in its performance.




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Study Question 4: What is social responsibility and corporate governance?



      Typical organizational
       stakeholders                                       Owners

                                           Suppliers                  Competitors




                               Customers                                            Regulators




                                                                                         Interest
                            Employees                  Organization                      groups




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Study Question 4: What is social responsibility and corporate
governance?

    Perspectives on social responsibility:
         Classical view
              Management’s only responsibility is to maximize
               profits.
         Socioeconomic view
              Management must be concerned
               for the broader social welfare,
               not just profits.



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Study Question 4: What is social responsibility and governance?



               Arguments against        Arguments in favor of
              social responsibility:    social responsibility:
           • Reduced business          • Adds long-run profits
             profits                   • Improved public image
           • Higher business costs     • Avoids more
           • Dilution of business        government regulation
             purpose                   • Businesses have
           • Too much social power       resources and ethical
             for business                obligation
           • Lack of public
             accountability


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Criteria for evaluating corporate social performance.




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Study Question 4: What is social responsibility and corporate
governance?

      Strategies for pursuing social
       responsibility:




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Four strategies of corporate social responsibility—from
obstructionist to proactive behavior.




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Study Question 4: What is social responsibility and governance?



      Corporate governance:
           The oversight of the top management of an
            organization by a board of directors.
      Corporate governance involves:
           Hiring, firing, and compensating the CEO.
           Assessing strategy.
           Verifying financial records.


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Study Question 4: What is social responsibility and governance?



      How government influences
       organizations:
           Common areas of government regulation of
            business affairs:
                  Occupational safety and health
                  Fair labor practices
                  Consumer protection
                  Environmental protection


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